When a glitch becomes a customer and legal problem

In the latest of a series of well-reported computer system breakdowns in the last few months (eg NAB, Qantas, Virgin Blue, ASX) described as “glitches” CBA’s ATM and internet banking network has had problems (see ABC News).

A glitch is usually defined as a hitch, snag or malfunction (Macquarie Dictionary) usually of short-term duration and not predictable, sometimes self-correcting and other times hard to fix (hence some references to the German word for slippery).

Whatever the reason, the consequences (particularly for financial institution customers) can be severe if they are not short-term or are not corrected.

That’s when companies look at their service agreements: usually there is a statement by the supplier that services will not always be error-free. That statement is sometimes balanced by performance standards enforced by a rebate in fees if services are not available for certain minimum periods.

What does your service agreement say about liability for glitches? If the service is material to your business you should discuss the liability for a glitch with your service provider.

Dilbert’s view

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